By A. R. Aderibigbe
Summary:
The government’s current tax reform drive, led by Mr. Taiwo Oyedele, appears more focused on boosting revenue than protecting struggling Nigerians. Taxing the poor in a bid to fix the economy is both unjust and counterproductive.
When the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, recently mentioned that “Runs Girls” and “Agberos” could fall under Nigeria’s expanded tax net, many Nigerians were taken aback. What seemed like a harmless illustration of inclusiveness in taxation revealed something deeper, which is the growing tendency of government to prioritize revenue collection over economic fairness and moral reasoning.
Indeed, Nigeria must reform its tax system. The country’s tax-to-GDP ratio remains among the lowest globally, and the informal sector holds enormous untapped potential. But when the reform conversation shifts toward taxing everyone irrespective of how income is earned or whether such income sustains even the basics of living, then it begins to look less like reform and more like fiscal desperation.
The committee deserves some commendation for proposing that individuals earning below ₦800,000 per annum be exempted from taxation. That decision acknowledges, at least on paper, the excruciating hardship many Nigerians face daily. However, this same provision starkly contradicts Mr. Oyedele’s earlier statement that “no country can become rich by taxing poverty.”
The contradiction is glaring when the numbers are placed side by side with global benchmarks. According to a recent classification by the World Bank, Nigeria is a Low-Middle-Income Country (LMIC), and the poverty line for such economies is about $4.12 per day. This translates to roughly ₦2.2 million per annum, meaning that any Nigerian earning less than this amount is effectively living in poverty.
By that measure, the proposed tax-free threshold of ₦800,000 is not just inadequate but it is insensitive. It fails to reflect the real cost of living, the devaluation of the naira, and the erosion of purchasing power experienced by the average citizen. In practical terms, anyone earning ₦1.5 million per year is still struggling to survive, not thriving.
If the government’s true intention is fair, it must raise the tax exemption threshold to at least ₦2.2 million annually. That figure aligns with both international poverty metrics and Nigeria’s current economic realities. Anything less means the system will continue to burden those who can at least afford it, further widening inequality and breeding resentment.
The danger in this approach is not merely economic but moral. A tax policy that targets those at the base of the pyramid while leaving wealthier segments under-assessed undermines the very social contract on which governance rests. Citizens are more willing to pay taxes when they see fairness, accountability, and visible returns in public services. Unfortunately, those elements remain largely missing in Nigeria’s fiscal landscape.
The government must also confront a more fundamental issue, “Trust”. Nigerians, just like people in other countries, are not resistant to taxation because they are unwilling to contribute, but because they rarely see value for money. Roads remain bad, power supply unreliable, education underfunded, and healthcare unaffordable or below standard. When citizens pay taxes but see no tangible improvement in their lives, taxation becomes a burden rather than a civic duty.
True reform should go beyond plugging fiscal holes. It should focus on stimulating productivity, creating jobs, and reducing dependence on non-transparent levies. Fiscal expansion without structural reform only multiplies inefficiency.
Nigeria cannot and should not attempt to tax its way out of poverty. Nations that have built prosperous economies did so by growing production, not by overtaxing consumption or subsistence income. The role of government should be to empower citizens to earn more, not to chase every possible source of revenue, legitimate or otherwise.
The current reform rhetoric, if unchecked, risks turning taxation into a blunt instrument that punishes the poor while letting structural inefficiencies persist. If the government truly wants to widen the tax net, it should begin with improving data systems, simplifying compliance, and eliminating multiple taxation and not expanding the dragnet to the most vulnerable or morally gray sectors.
As things stand, the fiscal reform agenda risks being judged not by its good intentions but by its heavy-handed execution. A sustainable and equitable tax system cannot be built on the backs of those already weighed down by economic hardship.
At the end of the day, “no country” in the words of Mr. Oyedele, becomes rich by taxing poverty. Nigeria must remember that wisdom as it reforms its fiscal future.
Aderibigbe, a Chartered Accountant, Compliance Professional, and Public Policy Analyst, is joining our growing list of columnists sharing their informed views on national and other issues.
